Imagine downloading a two-hour HD movie in three minutes to your new cell phone, then plugging the phone into your TV to watch the film. Make unlimited phone calls, surf online as much as you like and send unlimited text messaging for $70 a month, without a contract. Sign up to sell the same service to other people and get $10 a month for each person you sell to.

That's what a group of related companies including Zer01 Mobile, Buzzirk, Global Verge and Unified Technologies Group are promoting heavily online and at industry trade shows. The offer is attractive enough to garner coverage in top business and technology publications, at least one positive review from an analyst and even a "best in show" award from a magazine at the CTIA wireless industry trade show earlier this year.

Does it all sound too good to be true? If so, that's because it probably is. What little information is available about the services is vague, technically inconsistent, and doesn't match up with public records.

One key player in the network of companies is Mark Petschel. He's the CEO of Global Verge, the multilevel marketing firm that is recruiting people to sell Zer01's service, under the Buzzirk brand. Sales associates are paying $70 initially to become part of the program and $40 a month thereafter for back-office support.

Petschel is currently on probation after pleading guilty to securities fraud. According to a bankruptcy filing in the U.S. Bankruptcy Court for the Eastern District of Missouri, Petschel allegedly promised to invest $168,000 that he collected from several people, but instead spent some of the money on items like jewelry.

Petschel has been on the losing end of three contract disputes, including one in 2002 in which he was ordered to pay $50,000. The Circuit Court of St. Louis County has no record that he's complied yet with any of the rulings.

He also previously started a company called Everge whose setup was very similar to Global Verge's. It encouraged people to pay to become sales associates and then sell mobile services under the brand BizzBuzz. An Everge YouTube video from 2007 entices people to start selling the mobile service, which was to launch in 18 months.

No such launch appears to have occurred. The state of Missouri recently dissolved Everge for failing to file an annual report. The Circuit Court of St. Louis County recently ordered Petschel and Everge to pay more than $35,000 in back rent for the office building where Everge was located.

Petschel also appears to have had yet another similar company that tried to attract sales people who would sell online games. That company was called NuSkyWay, and it sold games through MVP Network.

The Web site scam.com has long threads of people discussing their concerns over these companies that Petschel has been involved in.

Zer01 CEO Ben Piilani said that Global Verge has signed up 50,000 associates to sell its unlimited mobile service. Petschel discovered Zer01 at the CTIA trade show in March and then approached the company with the idea of selling the service through a multilevel marketing setup, Piilani said. The two first met in May, he said.

But Piilani became aware of Petschel's securities fraud ruling only recently, and he claims that Petschel is stepping down from his position as Global Verge CEO as a result. "The company has a great business model," Piilani said about Global Verge. Petschel could not be reached for comment; there is no contact information of any kind on Global Verge's Web site and no phone directory listing at the address for him was found in court documents.

Petschel's former venture with BizzBuzz fell apart when Amp'd, a mobile virtual network operator, went under, Piilani said. That's because BizzBuzz's business model was to be an MVNO of an MVNO, an unusual concept and one that would likely struggle to be profitable. Jack Gold, an analyst with J. Gold Associates, said he's never heard of an MVNO of an MVNO. He suspects that network operators likely wouldn't allow such an arrangement in an effort to retain some control over the way their network is being used, in part to try to combat potential fraud or illegal usage of their network.

Zer01's parent company, UTG, a company founded by Piilani, also raises some questions.

For instance, UTG lists its head office under "Illinois offices," but provides an address for that headquarters in Creve Coeur, without noting the state. Creve Coeur is a suburb of St. Louis, Missouri. The leasing agent for that office building has no record of UTG at the location. A group that rents space in the building to small businesses said that UTG may have used space there in the past, but doesn’t currently.

Piilani said the building rents an executive office that he uses for a place to hang his hat when he's in St. Louis.

UTG then lists its mailing address at a mailbox rental store in Collinsville, Illinois. "Unified Technologies Group is a large holding company. There's not huge infrastructure associated with it. We're just a management team and large holding company is all," Piilani said.

UTG claims to own a wide array of companies, including The Yorkshire Foundation. That organization says it is in the process of filing to become a nonprofit. In the meantime, its Web site includes text that is nearly identical to text on the Bill & Melinda Gates Foundation Web site. Their taglines are also quite similar. The Gates Foundation describes its mission like this: "Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives." Similarly, the Yorkshire Foundation features this line at the bottom of its Web page: "Guided by the belief that every life has equal value, the Yorkshire Foundation enables changes to improve lives globally."

UTG also says it has received regulatory approval to launch banking operations under the name Yorkshire Capital Holdings. The Federal Reserve, which regulates the banking industry, does not show UTG or Yorkshire as organizations authorized to offer banking services in the U.S.

Despite the claims on the site, Yorkshire isn't yet approved to offer banking services but is in the process of getting such approval, Piilani said. The company plans to buy a credit union that he declined to name.

The state registrations for some of the companies tend to feature familiar names, without board members from outside of UTG. For instance, Rick Parker, who is listed as UTG's chief financial officer on its Web site, is named as president, secretary, treasurer and director of Zer01 in the company's registration filing in Nevada.

UTG is registered in Illinois, which currently lists the company as not in good standing for failing to file its annual report by a July 1 deadline. The registration names Reuben Piilani as president and Sharon Piilani as secretary. Both have the same address.

UTG is now registered in Delaware and so has let the Illinois registration lapse, Ben Piilani explained.

He has a relatively clean legal record -- except for traffic violations including a recent driving under the influence accident that left him hospitalized for two days -- but it is difficult to find information about the companies he has been affiliated with. According to his bio, he worked for Unlimited Telecom, a company that deployed the first commercially released "'Flat-Rate' telecom service in the United States market."

The bio also says that he launched a company called Internet Business Advertisement Directory, "the original online geographic based search engine for advertising businesses before AOL, Yahoo, and Google." He then started a company called I-Net Solutions, with a core product called the "Piilani Computer line." Online searches for IBAD and Piilani Computers only turn up references to Piilani's biography or scam.com. I-Net is a name that appears to be used by many different companies.

The technology itself raises questions. Zer01 has arrangements with multiple GSM (Global System for Mobile Communications) operators that it can't name for nationwide coverage and combines that access with a nationwide fiber network owned by UTG, Piilani said. Zer01 then uses a VPN (virtual private network) to send its VoIP (voice over Internet Protocol) calls over the wireless network.

But both T-Mobile and AT&T say they don't have relationships with Zer01. Without those operators, Zer01 is unlikely to be able to offer nationwide coverage, Gold said. If Zer01 had deals with all the other regional GSM operators, it still couldn't piece together a nationwide service.

Zer01 might be able to negotiate agreements with a regional carrier that includes the carrier's roaming agreements, although experts said carriers are unlikely to allow such an arrangement. Plus, Zer01 would have to pay the much higher roaming fees for its customers to use the networks beyond its regional partner's reach, making for a much more difficult business case.

UTG owns its own nationwide fiber network, which doesn't have a name, Piilani said. "We've been buying up fiber and collocate service in different data centers like Global Crossing," he said.

The service will be the first commercial launch of VoIP over cellular in the U.S., he said. To arrange the service, "we had to get around [wireless] carrier restrictions. If we had to resell their data, we'd be bound by data caps and the fact that they don't allow data for voice over Internet. The way we did that is to interconnect the fiber-optic infrastructure to the GSM network," he said.

"We own the consumer. We do all the customer support, tech support, provisioning of data, the telecom piece, all the content. So essentially to the carrier there's no extra cost," he said.

The carrier would, however, still have to load the customers onto the wireless portion of their network. That piece is typically the bottleneck for operators since they have a finite amount of wireless spectrum over which to carry traffic. "Even 2 to 3 million customers over a geographic area is not going to put that much load on," Piilani argues. He said Zer01 is constantly working with its carrier partners to monitor the usage.

Most operators impose a 5GB data download cap on mobile users, but that's not out of concern for overloading the network, he said. "The reason is, they don't want anybody to know, is they have this huge legacy infrastructure ... this huge legacy telecom thing they have to support," he said.

Gold disagrees with Piilani's reasoning. "If it's because they have old technology to support, they'll still have to support it. He's just going to make it worse," Gold noted.

Also, there are other reasons the operators limit data usage. "The reason they put a cap on things is because they know that if they give you unlimited bandwidth, you will use it. They started out with unlimited and had to back off because their networks were getting swamped. If you start to download a movie a day, their network is going to go down the toilet," Gold said.

It's the wireless component of Zer01's plan that puzzles Gold the most. MVNOs often run their own customer service and back-end systems and lease fiber to carry calls, so they would have a similar setup to the one that Piilani describes. Zer01 would have to arrange some sort of deal with wireless operators for unlimited data usage, and given existing market conditions that seems unlikely. "His model doesn't work," Gold said.

Zer01 says it uses patent-pending technology called Veritable Mobile Convergence, developed by UTG, which "allows each smart phone user to make voice calls or transmit data by sending voice communications through a VoIP system." A patent search did not reveal an application for technology called Veritable Mobile Convergence or patent applications backed by UTG.

VMC is a trademark name that UTG uses to cover the technology, Piilani said. On Friday, he promised to provide information about how to find the patent filing, but three days later the company had yet to produce confirmation that UTG has a patent application pending with the US Patent and Trademark Office.

Some Global Verge sales people, on the many sites they've put up to try to sell the Buzzirk service, say that Zer01 or UTG own 2100 MHz spectrum. Some sites say that UTG bought the spectrum for $50 billion. But Piilani said that's not true. The Buzzirk sales associations are "trying to throw around terminology to make the sales more interesting," he said.

Even a customer service representative on a Buzzirk sales site said via instant message that Zer01 owns the spectrum. "They use GSM phones and 2100 mhz. They have a fiber backbone that the service runs over. They convert the service to a digital signal in the phone and that is one reason it transmits as a digital code through the 2100 mhz and is faster," said Matt Chandler, the service representative.

UTG, Zer01 and Buzzirk do not turn up as winners of the licenses in the 2100 MHz auction, according to U.S. Federal Communications Commission records, although many companies use made-up names for the auctions. However, all the companies that bought vast amounts of the 2100 MHz spectrum are known.

A search on the FCC's licensing system page for Zer01, Unified Technologies and Buzzirk did not show that any of the companies have leased spectrum from another owner.